The Goods and Services Tax (GST) Council’s big rate revamp has set Dalal Street buzzing, and Motilal Oswal has rolled out its latest ‘Bu’y calls across key sectors.
With sharp tax cuts on automobiles, life and health insurance and continued strength in the hospitality sector, the brokerage sees multiple tailwinds for companies like Mahindra & Mahindra (M&M), HDFC Life Insurance, and Lemon Tree Hotels.
Motilal Oswal on M&M: A clear winner from auto GST cuts
Motilal Oswal has set a target price of Rs 3,687 on the stock, implying a 12% upside from current levels.
According to Motilal Oswal, M&M is set to be one of the biggest beneficiaries from the tax overhaul in the auto sector. The new structure removes the old 28% GST plus cess on most passenger vehicles and replaces it with a lat 18% rate. SUVs above four metres, meanwhile, will now attract 40%, down from the earlier effective 43–50%.
“While most of these measures have been on expected lines, the clarity on cessation of compensation cess and GST rate reduction for tractor parts will be an incremental key positive. M&M thus is the biggest beneficiary,” the brokerage noted.
It is also interesting to note that these changes come into force just before the festive season, a timing that could further boost demand.
Motilal Oswal on HDFC Life: Insurance gets a tax holiday
With a target price of Rs 910, the brokerage expects a 17% upside in HDFC Life, supported by higher demand as insurance policies become cheaper for customers.
Life and health insurance premiums will no longer attract GST after September 22. This marks one of the most consumer-friendly reforms in the latest Council meeting.
This is a direct positive for insurers like HDFC Life, which had earlier faced challenges with affordability and tax-related costs for policyholders.
Motilal Oswal remains bullish, highlighting the insurer’s strong execution and strategy. “We like HDFC Life as it continues to focus on enhancing channel economics through a multi-pronged strategy – diversifying the product mix, driving cross-sell and upsell, leveraging the bank’s digital assets, and improving customer experience,” the report said.
Motilal Oswal on Lemon Tree Hotels: Expansion and strong occupancy driving growth
Motilal Oswal has a target price of Rs 195 on the stock. This translates to a 16% potential upside from current levels.
Motilal Oswal has also turned positive on hospitality. Lemon Tree Hotels has been expanding strongly, and also recently the company signed six new properties across India, adding 413 rooms to its portfolio.
“It is expected to sustain this growth trajectory in FY26, led by the stabilisation of Aurika Mumbai, accelerated growth in management contracts and the timely completion of the portfolio’s renovation,” the brokerage noted in its report.
Sector outlook: Motilal Oswal on GST move
The sweeping tax reforms are not limited to autos, insurance, and hotels. By collapsing the previous four slabs into two, that is, 5% and 18%, the GST Council has effectively reduced prices across a range of sectors.
“We a positive on consumer, health & life insurance, automobiles, education supplies, electronic goods, cement, hotels, consumer finance,” Motilal Oswal added in its sector outlook.
Pharma exports, too, are expected to see tailwinds, with the government planning to increase shipments to Russia, the Netherlands, and Brazil. Meanwhile, consumer-facing businesses like Swiggy continue to raise platform fees, a trend Motilal Oswal views as positive for growth and profitability in the food delivery space.